GENERAL COMMENTS:
Friday's market was largely expected in the cattle sector as the market simply let time pass by leading up to the weekend, but the hog market didn't follow in the same manner. While demand is hot and supplies are thin, the futures market rallied higher in the week's end and even saw cutout values close mildly higher too. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.89 with a weighted average of $105.32. July corn is down 7 3/4 cents per bushel and July soybean meal is up $5.20. The Dow Jones Industrial Average is up 72.84 points and NASDAQ is up 11.64 points.
From Friday to Friday livestock futures scored the following changes: June live cattle down $1.80, August live cattle down $2.32; August feeder cattle down $2.35, September feeder cattle down $1.38; June lean hogs up $3.03, July lean hogs up $2.80.
** Livestock Comments will resume Tuesday, June 1, as the markets are closed on Monday, May 31, for Memorial Day. Happy weekend folks!
LIVE CATTLE:
Friday's live cattle trade wasn't exhilarating from any point of view as the contracts closed mostly lower and the cash cattle market only saw a handful of clean-up trade develop here and there. The big question heading into the weekend is once again: what will next week bring? How aggressive will slaughter speeds be post Memorial Day? Will boxed beef prices top or trade steady to slightly higher another week? Thankfully, beef demand continues to fuel this market from both a domestic and international point of view, but lousy throughput concerns many for the long-term trajectory of the market. June live cattle closed $0.47 lower at $115.87, August live cattle closed $0.82 lower at $118.60 and October live cattle closed $0.47 lower at $123.70. This week Southern live deals have been marked at $116 to $120, mostly $119 to $120, steady to $1 higher than last week's weighted averages. Northern dressed deals have a range of $187 to $192, mostly $191, generally steady with last week's weighted average basis Nebraska.
Friday's slaughter is estimated at 117,000 head, 2,000 head less than a week ago. Saturday's slaughter is projected to be around 34,000 head, 44,000 head less than a week ago.
Throughout the week, boxed beef prices trended higher, but not as drastically as they have in weeks past. Throughout the wee,k choice cuts averaged $329.64 (up $6.50 from last week) and select cuts averaged $303.34 (up $3.43 from last week) and the week's total load count of cuts, grinds and trim totaled 493 loads. The week's movement was still insufficient to meet all of consumers needs, inadequate throughput negatively affects all sides of the market -- cow-calf producers, feedlots and consumers alike.
Boxed beef prices closed mixed: choice up $0.99 ($330.97) and select down $3.20 ($300.90) with a movement of 80 loads (46.75 loads of choice, 12.97 loads of select, 10.17 loads of trim and 10.31 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. I genuinely hope that feedlots can break this doggish cycle of steady cash prices, but with packers having cattle committed for the weeks ahead, it's going to be a challenge to do so, and especially when boxed beef prices top.
FEEDER CATTLE:
Roll the dice or flip a coin, but the fate of the feeder cattle contracts this past week has solely evolved around the corn market's daily direction. If corn trades higher, then the feeder cattle contracts dip lower, and if corn trades lower, then, you guessed it, feeders are on the upward swing while the corn regression lasts. Friday's feeder cattle contracts traded lower even though the corn market did as well as traders weren't sticking around to kick the tires of the feeder cattle contracts while a three-day weekend taunted them before the market's close. August feeders closed $1.50 lower at $151.35, September feeders closed $1.30 lower at $153.52 and October feeders closed $1.22 lower at $155.02. At Herreid Livestock Market in Herreid, South Dakota compared to two weeks ago the best test seen throughout the market was on steers weighing 900 to 1,000 pounds which sold $3.00 to $5.00 higher. The best test on heifers were those weighing 700 to 750 pounds, which sold $2.00 higher. The area has finally gotten some rain which has improved grass conditions and is helping the outlook for turning cattle out on grass look better and better. The CME Feeder Cattle Index for May 27: down $0.45, $136.12.
LEAN HOGS:
The lean hog market has done it again! You can look at charts all day long, and you can study the dynamics of the fundamental market until you're blue in the face, but the fact remains, thin supplies amid unbridled demand drives prices higher. June lean hogs closed $1.52 higher at $117.24, July lean hogs closed $2.65 higher at $119.35 and August lean hogs closed $2.40 higher at $116.22. Looking to next week, the market will once again be watching slaughter speeds and the market's pork cutout value to see how consumer demand fares after Memorial Day. Pork cutouts total 319.23 loads with 281.73 loads of pork cuts and 37.49 loads of trim. Pork cutout values: up $0.22, $126.59. Friday's slaughter is estimated at 425,000 head, 38,000 head less than a week ago. Saturday's slaughter is projected to be around 22,000 head, 10,000 head less than a week ago. The CME Lean Hog Index for May 26: up $0.58, $113.08.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Following the long weekend, packers will likely be scouting the countryside hard come Tuesday to procure enough hogs to fit their kill schedule.
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